Crosspoint: Over 18,000 sqm added to Romania’s flexible office market in 2022
According to a new analysis carried out by Crosspoint Real Estate, the Romanian flexible office market had an encouraging evolution in 2022. In total, 18,129 sqm were added to the market last year, of which more than 11,000 sqm in Bucharest. And the flexible offices are expected to remain a profitable business for experienced operators in 2023, with four new medium and large locations set to open in Bucharest alone this year.
The shift to remote or hybrid working has positively affected the flexible office space segment in Romania over the last two years. “Seen more as a trend of the moment than as a convenient alternative to traditional working environments, flexible offices have become an important tool and have attracted new clients from industries other than IT who have started to be interested in coworking and serviced offices,” the company said.
In addition, amid the conflict between Russia and Ukraine, some Ukrainian companies and freelancers have been looking to relocate to Romania, and flexible spaces have been top options. As a result, occupancy rates of flexible offices have increased, with some of the established locations in Bucharest recording an occupancy rate of 85-90% in 2022.
According to Crosspoint’s analysis, 21 new coworking centres and serviced offices were opened in Romania in the post-pandemic period. In addition, three coworking hubs in Bucharest, Brașov and Oradea reopened after closing in 2020.
Bucharest hosts the most flexible offices in the country but also the largest, with an average of 1.260 sqm. Cluj-Napoca and Iași are next, with averages of 879 sqm and 529 sqm, respectively.
The same source said that coworking hubs remained the most widespread, but on average, they occupy smaller areas than serviced offices - 470 sqm for coworking vs 1,708 sqm for a serviced office.
“Although the rates charged by operators have remained relatively unchanged compared to the beginning of 2020, the rapid increase in the inflation rate and reaching a record level for the last few years will affect the flexible office market. It is likely that flexible space owners will have to adjust rates to align with new market costs in the coming period,” said Ilinca Timofte, Head of Research, Crosspoint Real Estate.
The same market study found that, although the existing stock of flexible office space remains below pre-pandemic levels nationally and in Bucharest, the segment has an increased capacity to recover due to the growing demand for such space. The last two years have highlighted the advantages and disadvantages of the flexible office market, which, while it can be an advantageous alternative to traditional offices, is very sensitive to change, Crosspoint said.
However, the company believes that flexible offices will remain a profitable business for experienced operators this year. In Bucharest alone, four new medium and large locations are expected to open, ranging from 1,000 to 4,000 sqm.
“If new entrants are now exploring new areas, experienced operators who have resisted and thrived in the current market conditions are expanding into regional markets and, to encourage collaboration and build communication and communities, are offering office space free of charge. So innovative environments are replacing the traditional office with coworking camps in the heart of nature, while large companies are choosing coworking for employees or collaborators working remotely,” Crosspoint Real Estate said.
Founded in 2005, Crosspoint Real Estate offers both real estate trading and consulting services, as well as financial solutions needed by large investors, for all types of properties: offices, retail, industrial, land, hotels and residential. Crosspoint Real Estate is the international partner of Savills in Romania, one of the largest real estate companies worldwide, with revenues of over GBP 2.15 billion generated in 2021.